PMEAC pegs farm growth at 4.8% in FY'14 on good monsoon

NEW DELHI: Prime Minister's key economic advisor C Rangarajan today pegged agriculture growth at 4.8 per cent for the current fiscal on expectation of a record foodgrains, pulses and cotton production buoyed by good rains.

The good performance in agriculture will have a moderating effect on food inflation though depreciation of the rupee may put some upward pressure, said the report of Economic Outlook for the 2013-14 fiscal released by him.

The report of Prime Minister's Economic Advisory Council (PMEAC), headed by Rangarajan, however, recommended promotion of high-value agriculture and reforms in agri-marketing policies including the APMC Acts for boosting further growth.

"Agriculture is projected to grow at 4.8 per cent in 2013-14 as against 1.9 per cent in 2012-13. Early and good monsoon had a huge positive impact on sowing activity. Thus, both kharif and rabi crops are expected to be good, " it said.

The farm sector growth will be higher than the growth trend of over 3.5 per cent in recent years, it said.

Driven by good monsoon and better reservoir position, PMEAC projected that overall, 2013-14 is likely to see higher output in rice and wheat, and significant gains in coarse cereals and pulses.

"Output of foodgrain can be expected to hit a new record this year. ...Output of pulses may be en route to crossing 20 million tonnes -- the highest output level ever recorded, and nearly double the production level of decade ago," the report said.

The country had harvested record 259.49 million tonnes of foodgrain in 2011-12 crop year (July-June). However, it fell marginally to 255.36 million tonnes last year.

According to PMEAC, oilseeds output should also be able to recover, to approach, if not exceed the 2010-11 levels of 32.5 million tonnes. Cotton output too should exceed the 35 million bales produced in 2011-12, it said.

It said output of horticultural produce (fruits and vegetables) and animal husbandry (milk, eggs and meat) as well as that of fisheries are likely to remain in upward trajectory with annual growth of around 4-5 per cent in the current fiscal.

Upto August 30 this year, area under kharif crops was reported to have increased by 6.4 million hectares or by 6.8 per cent compared to the same period of last year.

The largest increases during the period have been in pulses (15.3 per cent), coarse cereals (13.3 per cent) and oilseeds (12.6 per cent. The area under rice, the most important crop, was up by almost 1.0 million hectares (2.9 per cent).

A small decline was reported for sugarcane and a marginal change in the acreage under cotton in the same period.

With most of the active season over, south west monsoon has been unqualifiedly good for most of the country. The reservoir position in the week ending August 29, 2013, was 29 per cent better than the average of the last 10 years, it said adding that good reservoir position is indicative of good rabi harvest as well.